New Delhi [India], March 17 (ANI): Operating margins of television (TV) broadcasters are poised to rise 300 basis points to 15 per cent by 2026-27 with increasing digital offerings beaming up economies of scale, according to Crisil.
Rating agency Crisil has analysed TV broadcasters, accounting for 90% of the industry revenue.
According to the rating agency, while this rise in operating margins would nudge their profitability closer to the pre-COVID-19 pandemic levels, the business's continued success hinges on its ability to compete with other digital platforms amid shifting consumer preferences.
Their revenue was almost stagnant between fiscals 2021-22 and 2024-25 as consumers increasingly opted for digital content such as over-the-top (OTT) applications on TV or mobile or pure-plays such as YouTube and Instagram.
This trend is expected to continue because of accelerating broadband and internet penetration and the digital medium's natural advantages, such as the on-demand availability of content and the ability to actively engage with it.
As a result, revenue from traditional linear broadcasting is expected to be stable or fall marginally.
"To make the most of the rise in the popularity of digital media, broadcasters have already launched their own digital platforms (in the form of mobile apps or dedicated apps for smart TVs) for content such as live sports and news," Crisil said.
The growth in the digital segment is also helping broadcasters capture higher advertisement revenues from sectors such as fast-moving consumer goods, automobiles, e-commerce and real estate.
Rising subscription revenue has also been supportive.
Broadcasters, directly or indirectly, compete with OTTs and digital-only platforms for content acquisition and subscription revenue. Many platforms are moving content behind paywalls and exploring strategies to optimise content acquisition cost and pipe in more advertisements to generate more revenue.
Ankit Hakhu, Director, Crisil Ratings "As a result, digital revenues of these broadcasters grew 15 per cent on average over fiscals 2022-2025 and will continue to grow at in double-digits over the next two fiscals. With linear broadcasting segment nearly flat, this will increase the revenue contribution of digital to 25 per cent by fiscal 2027." (ANI)